>> Saudi Arabia's young Crown Prince, Mohammad bin Salman, spent 2 years laying the groundwork of a plan to sell $100 billion worth of shares in the kingdom's national oil company Saudi Aramco. The sale would have represented just 5% of the company, a $2 trillion evaluation. And could have been the largest initial public offering in history.
But after months of setbacks, then ambitious deal, a linchpin of the Crown Prince's reformist vision was called off. Reuters has learned the reason. His father, the King, stepped in and pulled the plug. Three sources with ties to Saudi government insiders said King Salman Bin Abdulaziz met with family members, bankers, and senior oil executives during the month of Ramadan at the beginning of the summer.
The advisers told the king that taking Aramco public would not help the kingdom, but would undermine it. Reuters' energy correspondent Jessica Resnick-Ault.>> When a company comes to market in the US or the UK, it's required to make a vast number of disclosures related to their oil holding reserves, their financial structure, earnings.
And all of those are things that would have to be reported in the depth that Aramco hasn't necessarily previously had to disclose.>> Reuters reported last week that the Saudis had spiked the plan. The Saudi Energy Minister said the government was committed to a public offering at an unspecified date in the future.
>> I think it''s premature to discuss whether this reveals some sort of hidden element in the balance sheets. Rather, I think the focus right now, is very much a political one, on who made the decision, why it was made, and who's in control in Saudi Arabia. And what that means for the kingdom's longer term outlook in the next five to ten years.
>> The plan was the brainchild of the 32 year old crown prince, part of what he's called his vision 2030 reform program, aimed at transforming Saudi Arabia's oil dependent economy. Sources told Reuters that even though the king's decision was a blow to the prince's agenda, Mohammad bin Salman is still the favorite son and heir, with a major influence on the country.
But the king showed he will be the deciding voice for the foreseeable future.